Transfer of sale of main Residence

[Teddybella1]

If a will states that a single person wants her main residence sold upon death, and after paying some bequeaths to grandchildren, the net proceeds be divided equally between her two children; does this qualify for the additional £100,000 allowance or does the will need to state the property will be transferred directly to the 2 children. Who will then sell it and pay the bequeaths from the proceeds.

[RMC]

Inheritance Tax main residence nil-rate band is available where the deceased LEAVES his home to one or more of his descendants; gifting sale proceeds does not qualify.

[Teddybella1]

Does your advice change if the house has to be sold as there is an equity release charge which requires it to be paid back upon death

[AGoodman]

The property has to be left to the descendants but the relief is still available if the property is then sold by the executors in the course of administration:

"The actual home doesn’t have to end up in the hands of the direct descendants. An estate could still be eligible for the additional threshold if the estate’s personal representative sells the home as part of the administration of the estate and passes the sale proceeds to the direct descendants."

https://www.gov.uk/guidance/inheritance-tax-residence-nil-rate-band#inh-home

That said, a direction in the will to sell the property would be stretching this and, as RMC says, probably wouldn't attract the relief.

It should be fine if the will leaves the property to the descendants either outright or as part of residue by the executors then have to sell to pay prior legacies or an equity release debt.

[maths]

As commented above the RNRB would not be available as the property itself is not being inherited by lineal descendants. It may be that the PRs sell it as part of the administration but it was nevertheless inherited.

Under the current proposal there is no inheritance of the property.